The challenge

Governments – as investors, issuers, regulators, procurers, and owners – are under growing pressure to become more sustainable financial entities.

Legal and accounting standards are evolving to require disclosure of climate and other sustainability risks, as well as evidence of feasible action to support targets and commitments. These have traditionally been geared towards the private sector but, more recently, there has been an increasing focus on governments and the public sector reporting.

Stakeholders such as investors, rating agencies and communities increasingly expect a consistent whole-of-government approach to Environmental, Social and Governance (ESG) risks and opportunities.

Policy Insights Paper

Sovereign Sustainability Reporting – NSW and Beyond

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Collaboration

Dr Angela Cummine joined JMI as a Senior Policy Fellow from July-August 2022 to research whether and how governments should be disclosing their sustainability impact. Dr Cummine undertook the research at JMI while on temporary leave from her role as Director of Sustainable Finance at NSW Treasury.

As part of the fellowship, Dr Cummine consulted a range of senior executives from NSW government agencies, as well as peer government officials, standard setters, and researchers in sustainability.

After the publication of her Policy Insights Paper in January 2022, the key themes were discussed at an interactive panel event at the University of Sydney, which brought together 50 experts from governments, financial Institutions, peak bodies, think tanks and universities.

In a nutshell

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The Policy Fellowship program allows public servants to combine practitioner expertise with sustained research to advance policy innovation and enhance public sector capability in NSW.

Dr Angela Cummine, inaugural JMI Senior Policy Fellow

Solutions

The results of the research were presented in a JMI Policy Insights Paper Sovereign sustainability reporting – New South Wales and beyond which made five recommendations:

NSW Government should not delay whole-of-government sustainability reporting and disclosure while international and domestic sustainability reporting guidance is being finalized and implemented.

NSW Treasury should produce a whole-of-government sustainability report, targeting financial market stakeholders (using the ISSB-aligned template in the report’s Annex A).

NSW government should adopt a sequenced approach to sustainability reporting and disclosure, growing capability and stakeholder reach over time, while acknowledging the interconnected nature of sustainability matters.

NSW government should show leadership and sustainability reporting by adopting a double-materiality approach.

NSW government should release its sustainability report with the State of the Finances report, but separate from Budget and Half Year reporting, to minimise politicisation risk.

How we are creating change

Dr Cummine’s fellowship and JMI Policy Insights Paper has already had significant positive impact. The insights have informed relevant briefing notes and advice within NSW Treasury and provided practical ideas for how whole-of-government sovereign sustainability reporting could be framed.

This has prompted broader discussion within government agencies as well as across peer jurisdictions on the role, content, scope and value of these reports.

It also contributed to building internal knowledge in core teams across the sector that are responsible for reporting or disclosure. Through its method, the report encouraged those teams to adopt a comparative and international best practice approach.

Tracking progress

Government sustainability reporting: JMI gathers experts to discuss new report by JMI Senior Policy Fellow from NSW Treasury

Published May 4, 2023